Custom, Excise & Service Tax Tribunal
M/S Gayatrimata Industries vs Commissioner Of Central Excise And ... on 27 November, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/1806/2012-SM [Arising out of Order-in-Appeal No. 180/2012 dated 27/03/2012 passed by the commissioner of Central Excise (Appeals), Mangalore] For approval and signature: HON'BLE SHRI ASHOK K ARYA, TECHNICAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes M/s GAYATRIMATA INDUSTRIES GAS FACTORY CROSS, BELUR ROAD, DHARWAD-580 011 Appellant(s) Versus Commissioner of Central Excise and Service Tax, BELGAUM NO. 71, CLUB ROAD, CENTRAL EXCISE BUILDING, BELGAUM, - 590001. Respondent(s)
Appearance:
Mr. Dayanand. K., C.A. For the Appellant Mr. Pakshirajan, A.R. For the Respondent Date of Hearing: 27/11/2015 Date of Decision: 27/11/2015 CORAM:
HON'BLE SHRI ASHOK K ARYA, TECHNICAL MEMBER Final Order No. 22128 / 2015 Both the sides have been heard in detail.
2. The matter concerns with the payment of service tax on the service of the transportation of the goods, where individual lorry owners - who are father and son provided the services to the appellant (a partnership firm) and this partnership firm is made up of the same father and son who are the individual lorry owners. It is pointed out by the learned Chartered Accountant, Shri Dayanand. K., representing the appellant that out of the total liability of Rs. 93,666/-, about more than Rs. 7000 8000 paid for the transport service provided by lorry owners i.e. other than father son lorry owners. He argues that they are not liable to pay service tax as for the services provided by individual lorry owners the liability of service tax is not sustainable. In this regard, he cites in support the decision of the CESTAT Bangalore in the case of C.C.E. &., Guntur Vs. Kanaka Durga Agro Oil Products Pvt. Ltd. [2009 (15) S.T.R. 399 (Tri.-Bang.)]. He says that this decision of the CESTAT, Bangalore has held that only transport booking agents are covered under Goods Transport Agency Service and in case of individual truck operators, service tax is not liable to be charged.
2. The learned C.A. also argues that for the larger part of the liability i.e. about 90%, when father and son, who are individual lorry owners, have provided the services to the partnership firm/appellant, where the partners are same father and son, service tax is not liable. He further argues that they have already paid service tax and interest in full as established and intimated by the Revenue by the orders passed by authorities but they do not want refund of any service tax paid already; and they would like to be exempted from payment of penalty as was no intention on their part to not to pay the service tax and it has already been paid along with interest. The learned C.A. cites provisions of Section 80 of the Finance Act, 1994 saying that there was no clarity on the payment of service tax for the transport services during the relevant period and therefore, there was reasonable cause for their failure to timely pay the said service tax and they should be given the benefit of provisions of Section 80 of the Finance Act.
3. Learned A.R., Mr. Pakshirajan representing the Revenue argues that service provided by individual transport operators is liable for payment of service tax and said service tax is paid by the recipient of such services only. He cites in support the judgement of Honble High Court of Madras in the case of Commissioner of Central Excise, Salem Vs. K.M.B. Granites Pvt. Ltd. [2014 (35) S.T.R. 63 (Mad.)] saying that the Honble High Court of Madras clarified that individual truck operators in case of transport services provided by them would be covered the expression of commercial concern as appeared in Section 65(50b) of Finance Act, 1994.
4. The facts on the record and the submissions of both sides have been carefully considered. The appellant is not pleading for refund of service tax and the interest which they have paid already. Therefore, there is no need to discuss their liability of service tax on the impugned transport services. However, in the light of the judgement of the Honble High Court of Madras in the case of K.M.B. Granites Pvt. Ltd. (supra), it is clear that transport service even when it is provided by the individual lorry/truck operators, is chargeable to service tax.
5. The appellant is pleading that they should not be imposed penalty as during the relevant period, law of service tax in case of transportation service was not very clear. In the light of the facts and pleading of the appellant and considering the provisions of Section 80(1) of Finance Act, 1994, it is held that the penalty imposed under Section 78 of Finance Act, 1994 on the appellant is not sustainable. Consequently, the appeal is partially allowed by setting aside the penalty imposed on the appellant by the original authority and sustained by the Commissioner (Appeals). The appeal is disposed of in above terms.
(Pronounced in open court) (ASHOK K ARYA) TECHNICAL MEMBER /vc/